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The product development group functions as the swing activity between product marketing and research and development. It is involved with the selection of product(s) that will satisfy marketing needs for the new product launch.

Choosing Consumer and Product Targets

Eileen Pierce, founder of ESPierce Consulting, advises that lifestyle trends of target consumers are a top consideration; then narrow it down to consumer product usage trends—along with an in-depth study on the competitive marketplace.

“The brand’s personality, and the consumer, first and foremost,” says Trae Bodge, Trae Bodge Consulting, and formerly the creative director for Three Custom Color Specialists. “[And if expanding an existing line] you always want the new collections the make sense and not seem random.”

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Karen Young, CEO, The Young Group, also notes understanding target audience and positioning the launch for that audience. Further analysis of the current portfolio, analysis of need-gaps and new category expansion should be undertaken, according to Sharon Garment, SG Beauty Development—who also advises that it is also a good time to study the applicability of new technologies and innovations.

"In the case of a start-up company, it is most important to find a unique position in the market,” she says. “If the company/brand is known for skin care then branching out in that area would be most advantageous, or a treatment makeup line would also work.”

Choosing a Product Category

This is the basic meat and potatoes question around which the entire new introduction will revolve. If you are a makeup brand, do you want a new lipstick colors, new lipstick performance or go in a different direction entirely. In most cases the marketplace will determine what the next introduction will be, either in the form of new activity from competitors or trends emerging from other categories. Because the beauty industry is so closely linked to fashion, you can get some clues from fashion and color trends being shown in the new fashion shows. There are also broader social trends that impact a consumer’s demands, such as increased awareness of the harmful effects of the sun, natural vs. synthetic, etc.

Determining Brand Positioning

“You need to find s brand identity that can be yours for years to come,” says Katja Bartholmess, founder and brand strategist at Copy Gold. “That can be tricky, as what is a unique corner of the market today may border on the generic tomorrow. There was a time when MD-backed skin care lines were very few and far between—or natural skin care brands or mineral-based color cosmetics. But look at the shelves today. If 'mineral,' or 'natural,' or 'dermatologist' was all you had planned for in terms of differentiation, it wouldn’t be much.”

Determining Where to Market the Product/Line

“Previous history is always the guide, evaluating where the product will sell best," says Donna Barasch. Cost of goods must be aimed at the class of trade. The distribution direction must be decided before the packaging, ingredients, displays, etc. are chosen so the product is profitable.”

Determining the Price Point

One factor to consider is the competitors’ price points. Finished product costs will also influence the price point. Prestige market will allow for a higher price point than mass or "masstige."

Calculating Cost-of-Goods

Kellie Como, VP fragrance and product development, InterParfums, points out that costs will, among other factors, depend on where the product will be positioned. High-end formulations will have a higher price point and therefore can allow for a higher cost of goods (COG). It will also be most important to maintain a decent margin of profit. Garment points out that minimum production order requirements and component costs often provide a challenge to achieve optimal COGs.

Drivers of the Development Time Table

Many different factors impact the setting of a time table. It can depend on the complexity of the formula (start from scratch, OTC, extra testing-clinical-to support claims), ship dates that are established in advance of launch, packaging development and production lead times.

Other Activities of Product Development

Establishing the product profile

Scouting new technologies

Selection of development laboratory and contract (private label) manufacturer

Assessment of product aesthetics

Establishing product claims

Consumer, stability, product performance testing

Presentation of product ideas

Supervising formula development schedules

Packaging compatibility

Regulatory compliance

Fragrance development

Art Rich, PhD, is a member of the GCI magazine editorial advisory board. In addition, he is founder and chief consultant at A. Rich Development, LLC., which was founded in 2001. Rich has more than 30 years of experience in the development of marketable personal care and cosmetic formulas for such companies as Johnson & Johnson, Avon, and Bath & Body Works. He can be reached at arichdevel@yahoo.com.